What is a Chapter 7 Bankruptcy?
A chapter 7 bankruptcy, or complete discharge bankruptcy, allows you to discharge all of your debt and keep certain exempt property.
For a list of exemptions click here or scroll down.
You are eligible to file for a Chapter 7 bankruptcy eight (8) years. Also you must show based on your income, expenses, and debts, that you are unable to complete a Chapter 13 repayment plan.
The Automatic Stay
Once you file a Chapter 7 bankruptcy an Automatic Stay goes into effect. This Stay stops garnishments, home foreclosures, car repossessions, bank account levies, and other collection attempts.
The Meeting of Creditors
A 341 Meeting of Creditors will be held within 45 days of the bankruptcy filing. This hearing is usually brief lasting about 15 minutes. In most Chapter 7 bankruptcies, this is your only personal appearance. Attorney Bird will be at this meeting to help you answer any questions that the Trustee may ask.
The Bankruptcy Discharge
After your Chapter 7 bankruptcy is completed, all of your debts listed in the petition are discharged except child support, spousal support, student loans, taxes, reaffirmed debts and debts that the court has declared nondischargeable because the creditor objected (for example, debts incurred by your fraud or malicious acts).
Credit Counseling
Before filing a Chapter 7 bankruptcy, you must complete a Credit Counseling session. The certificate that you receive session is good for 180 days from completion of the session. Counseling may be provided in person, by telephone or over the Internet. It is estimated that the briefing will take about 1 ½ to 2 hours. My office will give you a list of approved credit counseling providers close to your home.
You must also complete a Personal Financial Management course in order to receive your discharge. This course is taken after you file for Chapter 7 bankruptcy but within forty-five (45) days from your First Meeting of Creditors.
Ohio Bankruptcy Exemptions
This list of exemptions updated December 2009. All law references are to Ohio Revised Code unless otherwise noted. Federal bankruptcy exemptions are not available in Ohio.
Homestead
2329.66 – Real or personal property used as a residence up to $20,000. Tenancies by the entirety are exempt without limit as to debts of one spouse [In re Thomas, 14 B.R. 423 (N.D. Ohio 1981)].
Personal Property
517.09 & 2329.66 – Burial plot.
2329.66 – (1) motor vehicle up to $3,225; (2) cooking unit and refrigerator up to $300 each; (3) cash, bank, and security deposits, tax refund and money due within 90 days up to $400 total; (4) household goods, furnishings, appliances, jewelry up to $1,350, books, animals, musical instruments, firearms, hunting and fishing equipment and crops up to $525 per item; (5) health aids; (6) wrongful death recoveries for person you depended upon for support; (7) compensation for lost future earnings needed for support; (8) personal injury recoveries up to $20,200; (9) $400 of any property; and (10) Tuition credit or payment. NOTE: Section 2329.66 is relatively detailed and complex, so be sure to read it.
Wages
2329.66 – Greater of the following: 30 times the federal minimum hourly wage or minimum of 75% of disposable weekly earnings. Judge may approve more for low income debtor.
Pensions
11 U.S.C. § 522 – Tax exempt retirement accounts; Traditional and Roth IRAs up to $1,095,000 per person.
145.56 – Public employees.
146.13 – Volunteer firefighters’ dependents.
742.47 – Police officers and firefighters.
2329.66 – Public safety officers’ death benefits; ERISA-qualified benefits, IRAs Roth IRAs and Keoghs needed for support.
3309.66 – Public school employees.
5505.22 – State highway patrol employees.
Public Benefits
2329.66 & 2743.66 – Crime victims’ compensation received within 1 year of filing for bankruptcy.
2329.66 & 3304.19 – Vocational rehabilitation benefits.
2329.66 & 4123.67 – Workers’ compensation.
2329.66 & 4141.32 – Unemployment compensation.
2329.66 & 5107.12 – Public assistance.
2329.66 & 5115.07 – Disability assistance.
Tools of Trade
2329.66 – Tools, books, and implements of trade up to $2,025.
Alimony and Child Support
2329.66 – Alimony and child support needed for support.
Insurance
2329.66 – Benevolent society benefits to $5,000.
2329.66 & 3917.05 – Group life insurance policy or proceeds.
2329.66 & 3921.18 – Fraternal benefit society benefits.
2329.66 & 3923.19 – Disability benefits needed for support.
3911.10 – Life, endowment or annuity contract dividends, interest, loan, cash, or surrender value for your spouse, child or other dependent.
3911.12 – Life insurance proceeds for spouse.
3911.14 – Life insurance proceeds if policy prohibits use to pay creditors.
Miscellaneous
1775.24 & 2329.66 – Business partnership property.
Wildcard
2329.66 – $1,075 of any property.
